July 2014: The results of a study of the Mayor’s home energy efficiency programme, RE:NEW, has recently been published in major academic journal Energy Policy (which – for once – is freely available online!) focussing on the first major roll-out of phase of RE:NEW, delivered between July 2011 and April 2012, where 50,683 homes underwent a RE:NEW home energy visit.

The conclusions set out in the paper are quite stark and concludes that with respect to the programme’s engagement with households, that RE:NEW:

Visits do not overcome the barriers to the installation loft and wall insulation.

The paper’s author researched the delivery of RE:NEW in three inner London boroughs and provides a helpful contribution in understanding the limitations and constraints of the programme. The paper also identifies why the design of the programme may have contributed to the challenges RE:NEW faced in achieving its goals and also in engaging effectively with householders. These include:

“The RE:NEW programme and the specification of the visit were conceived at City Hall and were based on a policy intent of reducing carbon emissions, rather than as the result of demands or expressed desire from residents. As a result, the appetite for the programme, from householders, was questionable.”

one of the limitations of the home energy visit was the time constraint on visits. Visits generally lasted about an hour and this was due to a number of reasons. Most of the advisors were employed as contract workers and were paid a fixed price for each visit delivered…there was a focus on the number of visits delivered, rather than the length or quality of the visit.

the short visit length meant that advisors did not have adequate time to install all of the easy measures provided during the visit.

The effectiveness of visits, specifically in relation to encouraging the adoption of curtailment behaviours, was limited by the expertise of the ‘energy advisors’ who had inadequate training prior to delivering visits.

over 70% of the visits to the sample groups in local authorities B and C, the householder receiving the visit was living in rented (privately, council or RSL) housing and did not have control over the potential to install further measures.

the GLA and the local authorities were focused on achieving different outcomes from the RE:NEW visits. For the GLA, the focus of the visits was on reducing carbon emissions, whereas for the local authorities, the focus was on reducing fuel poverty, but these differing aims are not necessarily complementary

If an impact-oriented approach is taken to reducing carbon emissions then the focus of home energy visits may better placed be on high energy consumers, who are likely to be from more wealthy neighbourhoods and home-owners who will have the control over their properties to make structural changes. Though using tax-payers money to fund such work is unlikely to be politically acceptable

Overall, the study concludes: “Negligible savings were achieved as a result of the installation of significant measures. The impact of the visit on energy and water saving behaviours were also negligible. Overall, for these households, the impact of a visit led to an estimated average reduction in annual household emissions of 3%.”

The paper notes that some of the limitations of the RE:NEW programme have been recognised, and were set out in an evaluation report published earlier this year by the GLA (see earlier post here for background and link to paper).

A third phase of the RE:NEW programme has recently been initiated by the GLA.

June 2014: DECC have just released their 2014 Annual Fuel Poverty Statistics Report, accompanied by a dizzying number of data sets (all for 2o12), which attempt to detail fuel poor households by housing type, who lives there, by region etc.etc. The headlines of all this work is that government estimate that, in 2012, absolute numbers of fuel poor households had fallen slightly, when compared to previous years, to approximately 10% of all households in England. The overall change in the number of households in fuel poverty was relatively small – with the reduction happening mainly due to income increases for higher income fuel poor households. However, it’s also reported that the number of households in fuel poverty is projected to increase in 2014, with increases in energy costs a key factor.

Key findings include:

The importance of energy efficiency: households are far less likely to suffer fuel poverty if they live in a better insulated home

The much higher incidences of fuel poverty in unemployed households, and those living in privately rented accommodation.

Though the data indicates a lower proportionof fuel poor households in London than other regions (attributed in the report to higher incomes in London and greater access to the gas grid) the findings above are of particular importance to the capital due to the high (and increasing) number of households living in the privately rented sector, and the much lower levels of activity achieved by the government’s energy efficiency programmes in London.

The recent changes adopted by government in how to define when a household is in fuel poverty (as set out in the government’s 2013 ‘Fuel Poverty: A Framework for Action) – under a new ‘Low Income Household Costs’ (LIHC) indicator – specifically takes housing costs into account for the first time. Not surprisingly, this was thought to have a significant impact to the numbers of fuel poor in London due to the higher housing costs observed in the capital – with a predicted near 50% increase in the number of fuel poor households (see here for details). The Fuel Poverty report doesn’t however appear to provide any commentary on how differences between regional housing cost differences may have impacted on fuel poverty numbers.

Though the proportion of fuel poor households in London is estimated to be lower than most other regions it can also be seen from graph above (copied from the report) that London has seen a much smaller drop across the decade in the number of fuel poor homes than other regions.

The key data breakdown for London is set out in a separate spreadsheet document – the ‘2012 sub-regional fuel poverty data: low income high costs indicator‘. The data includes a local authority breakdown of data and reports that Newham has the highest incidence of fuel poverty in London with close to 1 in 7 homes deemed to be fuel poor, followed by Harrow, Brent and Waltham Forest.

‘Fuel Poverty Trends 2003-12′ provides long term trends under the new Low Income High Costs (LIHC) indicator including a time series on number of households estimated to be fuel poor. The data for London is copied below and indicates that the proportion of London households in fuel poverty initially dipped in the early party of the century, but has increased again, hitting a maximum of 13.2% in 2010, before falling again slightly.

The ‘Fuel Poverty Detailed Tables‘ provide limited regional information, but provided data on fuel poverty by housing type, age of residents, age of dwelling, energy efficiency of dwelling, working status, tenure etc. An additional indicators note is also available here.

June 2014: The government announced a review of its ECO (Energy Company Obligation) programme in December 2013, against a backdrop of considerable media coverage, across many months, on the rising costs of consumers’ energy bills – all of which culminated in the Prime Minister’s alleged ‘cut the Green Crap‘ quote .

The ECO sets a legal obligation on energy suppliers to provide a reduction in carbon emissions through supporting the uptake of energy efficiency measures in the domestic sector. Each supplier (effectively the ‘Big 6′) has a specific target assigned to it by government depending on the number of domestic gas and electricity customers they supply. The ECO is paid for through a charge on all household energy bills – which is then collected by suppliers and is in turn used by them to help subsidise energy efficiency programmes – such as reduced cost insulation measures. Each household is estimated to pay around £50 a year to pay for ECO (approximately – it depends on the level of charge passed on by the supplier to their customer to meet the costs of their ECO target), which amounts to around £1.3bn a year total ECO spend. The proposals put forward in ECO consultation, with reductions in supplier target levels, and ‘stretching out’ of the targets to March 2017 (see below), are thought to reduce the cost of ECO to households by £30-35 ie a small reduction in energy bills (around 2% against an average energy bill of £1,300) – but also an overall reduction in the amount of money going to fund the government’s main efficiency programme. It should be noted that predecessor ‘supplier obligation’ programmes have operated in the UK since the mid-90s (EESoP, EEC, CERT, CESP) and have contributed significantly to helping improve the energy efficiency of UK homes (see section 6.13 of latest DCLG English Housing Survey report here).

Following the December press release, a consultation paper – the ‘Future of the ECO‘ – was released on 5 March, which closed for comments on April 16th. The consultation set out a wide number of proposals – of which the major ones were to:

Extend the operation of ECO beyond the current March 2015 deadline to March 2017

Set new targets for the three sub-obligation targets (CERO, CSCO and HHCRO)

Reduce the major sub-target of the ECO – the Carbon Emissions Reduction Obligation (CERO) – target by 33 per cent.

The Mayor has posted his response to the government’s proposals highlighting a number of key concerns including that:

December 2013: The latest GLA Investment Performance Board meeting includes a useful progress report on the various Mayoral delivery programmes. ‘Project Performance Report‘ paper 10b Appendix 2 includes information of some challenges currently being faced by the Mayor’s residential energy efficiency scheme RE:NEW. The paper states:

“Delivery of the RE:NEW Phase II carbon targets are significantly delayed and contractors will miss their contractual obligations. This is largely due to delays in the availability of ECO. The mitigation options are being reviewed including withholding performance payments and reallocating funding to the RE:NEW Support Team to reduce any shortfall in achieving the carbon targets. This combined with a delay in having to wait for confirmation from the EIB for ELENA funding prior to commencing procurement of the full RE:NEW Support Team means the 2013/14 carbon targets may not be achieved…”

The delays have led to the project being graded an ‘amber’ rating under the paper’s ‘traffic light’ performance system.

RE:NEW has retrofitted over 99,000 homes to date since it was created in 2009

Over the next three years, RE:NEW will aim to support the letting of contracts that will save approximately 186,000 tonnes CO2 per annum through retrofitting approximately 232,000 homes

Capita Symonds were appointed to operate an interim RE:NEW Support Team – and began work in June of this year, with the GLA’s £150k funding covering programme activities until the end of December 2013. The RE:NEW paper proposes extending this funding by up to £200k for the Support Team to continue activities until the end of March 2014.

In contrast to the Investment Board’s mention of programme delays, the Housing Group’s paper relates that “progress made by the [RE:NEW Support] team to date has been excellent. The target of 1,500 tonnes of CO2 saved has been substantially exceeded; two contracts have been signed, with Brent Housing Partnership and LB Lewisham representing a total capital value of £24 million, and a saving of 4,333 tonnes CO2 per annum. There are a further 6 projects in procurement equating to a further £17.5 million capital investment and a saving of almost 6,000 tonnes CO2. This includes projects from Tower Hamlets Homes, LB Wandsworth and LB Havering. A further 17 boroughs and housing associations are engaged with the Support Team at the earlier stages of project development.”

The Housing paper also relates that the GLA is hoping to secure up to £3.85 million from the European Investment Bank’s (EIB) ELENA programme “to procure the full RE:NEW Support Team for three years”. The funding process with the EIB has however taken longer than anticipated, leading to the necessity to provide funding to an interim support team.

The paper interestingly also sets out risks associated with not securing this ELENA financing, as well as not being able to access sufficient ECO funds as a consequence of the Government’s recent pronouncements on the supplier obligation energy efficiency programme. The paper states “Changing the ECO model would require secondary legislation…The [GLA] Environment Team is currently developing a proposed lobbying approach to help to address this risk, which may include lobbying for a regional target. If successful this could improve the follow [sic - must be 'flow] of funding for projects.”

The paper highlights that a formal submission to the EIB has now been made and “funding confirmed in principle” should be sometime this month. Hopefully the EIB will be presenting the GLA with a welcome Xmas present this year – watch this space!

LABOUR leader Ed Miliband rocked Westminster with his pledge of a 20-month freeze on energy bills.
While ministers scoffed it wouldn’t work, they were stung by its popular appeal with voters.

Now after two months of head-scratching, they have come up with an alternative plan to keep prices down.

Here the Prime Minister and his Lib Dem deputy reveal plans to slash £50 off the average bill – and explain how they’ll do it:

BECAUSE of the hard work of the British people, and because we have stuck to our long-term economic plan, Britain’s economy is now on the mend – and we’re determined to help families in every way we can.

The Coalition is offering real help in these hard times: income tax cuts, a council tax freeze, a fuel duty freeze and free school meals for young children.

We have only been able to do this because we have taken difficult decisions and our economic plan is working.

This week, we will announce further help: proposals that will be worth around £50 on average to energy bill-payers.

We’re doing it without taking any help away from poor families or sacrificing our green commitments; and in a way that will keep Britain’s lights on in the long-term too.

When you look at your bill you see it is made up of various costs. Some of these we can’t control.

Most of what you pay is determined by the price of energy in the global market – the gas and oil we’re buying from the Middle East or Europe.

Politicians in the UK cannot wave a magic wand over these prices. To pretend you can is fantasy politics.

But there are bits that government can control – the parts of your bill that go to helping the poorest families heat their homes and to making Britain more energy efficient.

Some say we should drop these commitments entirely but we do not agree. As we approach winter, we refuse to turn our backs on the worst-off families. And if we abandon our green commitments, it is our children and grandchildren who will pay the price.

This Coalition Government has never pursued quick fixes today when they’ll hurt people tomorrow - and we’re not going to start now.

So we are going to stick to these commitments but we are not going to ask you to pay for all of them through your bills.

The two million poorest families who currently receive a discount on gas and electricity will continue to do so, but Government will pay for it. We’re able to afford this because we have cracked down on tax avoidance – leaving us more money to help struggling families. We are also changing the way we fund improving energy efficiency in Britain’s homes.

We will all be better off when our homes lose less heat, so we want the energy companies to help insulate as many homes as possible over the next decade.

But – apart from in the worst-off homes – we’re going to spread the costs of these programmes over a longer time frame, reducing people’s bills.

And to make sure we carry on cutting enough carbon, the Government will pay for new incentives for people to insulate their homes.

Alongside the Green Deal, when you buy a new home you could get up to £1,000 from Government to spend on energy-saving measures – equivalent to half the stamp duty on the average house – or even more for particularly expensive measures.

It is an all-round win. Better insulation means cheaper bills, it will cut carbon emissions and boost British businesses who provide these services.

On top of that, we will offer cash incentives to landlords of the least energy-efficient properties so that, when they are between tenants, they can better insulate their properties. And we’ll also make sure our schools and hospitals are more energyefficient, too.

Taken together, these things mean we will meet our green commitments and support those employed in the insulation industry but, crucially, without putting the cost on energy customers.

Labour have promised a temporary price freeze on energy bills. But they’re taking people for fools. Energy companies would hike up prices both before and after the freeze – so families would end up paying more.

Not only that, by cutting investment in green energy, their freeze would threaten thousands of jobs.

Labour’s con is the worst of all worlds. When an offer sounds too good to be true it usually is.

The Coalition has come up with a serious and credible plan that actually works.

By taking the time to get this right, we’ve got the best outcome all round. No poor family will lose a penny of help.

Our clean energy sector will get the investment it needs, the lights will stay on and we will cut just as much carbon as we planned.

Instead of a fake giveaway, we’ve found another way to support Britain’s hard-pressed families when they need it most.

The number of Londoners living in poverty has seen little change over the last few years.

More than a third of London’s children are in households with income below the poverty line, though rates have again fallen. The poverty rate for children in London, after housing costs, remains higher than for any other region, but is at its lowest level for 16 years.

Child poverty in Outer London, before housing costs are taken into account, has fallen to the same level it was when the Government set Child Poverty reduction targets.